Major projects such as King's Cross station in London require detailed planning

Planning authorities have long complained about lacking resources to offer the service demanded by developers. The challenges now are as acute as they have ever been. Planners are tasked with implementing reforms unveiled in the government's localism bill while maintaining development services.

Planning applications can involve huge amounts of work on both sides, but the fees have historically been set by central government. However, in keeping with wider moves towards greater autonomy for local authorities, the government is now consulting on proposals that would mean councils setting fees themselves.

In theory, this will allow local authorities to charge a sustainable amount for dealing with planning applications. Setting fees at a local level should result in a tariff more closely linked to individual departments' overheads and the real cost of processing applications.

Public sector planners have welcomed the proposals. Planning Officers Society president Stephen Tapper says: "The national regime we have at the moment doesn't take into account local circumstances or the true cost of doing this work in many places.

"Setting fees individually would give us the ability to relate the application fee to the cost of dealing with particular projects in particular locations."

The Local Government Association has also expressed support for the idea. It has even suggested the concept could be rolled out across other local government services including licensing applications and property searches.

Councillor Gary Porter, chairman of the Local Government Association environment board, says: "Allowing councils to charge the full cost of processing planning applications will help plug a £230m black hole in the planning system.

"Last year town halls had to subsidise developers by more than £500 for every planning application submitted because rules set in Whitehall prevented them charging the full cost."

The prospect of additional fees has been met with inevitable concern from the private sector. Developers have warned that the system could be used to try and tackle budget cuts without a corresponding improvement in efficiency.

The localism agenda

Liz Peace, chief executive at the British Property Federation, says: "The localism agenda suggests that the government will almost certainly go down the route of giving local planning authorities control over setting planning application fees and allow them to recover the full cost of the service.

"Inevitably there will be problems arising from this, not least that with cuts to local authority budgets developers could be faced with much higher fees for a poorer service. More detail is required, but there is a real fear that costs will simply be piled onto the developer."

However, many developers are already familiar with the practice of paying additional fees to help councils deal with applications.

Richard Keczkes, head of planning at commercial law firm Olswang, says: "This would put on a more formal footing a practice which has been growing for some years. It's not at all uncommon for larger developers to make a cash contribution to assist a planning department with an application."

More formal solutions to the problem have been floated before. Planning performance agreements were promoted by the previous government as a way of securing funding to process applications. Councils and developers could agree a timetable for dealing with applications for major infrastructure and set fees specific to individual projects.

But the Planning Officers Society warned at the time that the system would lead to accusations of planning permission being bought. Tapper says that allowing planning departments to set fixed fees across the board will avoid this problem.

Locally-set fees may be higher. But at least they will be predictable, and a fixed tariff avoids charges of corruption. A higher fixed fee could offer both planning departments and developers far greater certainty about the costs involved in taking an application through the system.

As the economy recovers and construction projects become viable, the number of planning applications will increase. Local authorities will need to find the resources to deal with them and support is unlikely to come from central government.

Keczkes adds: "I think developers would rather have well-resourced local authorities that are able to handle applications."

If charging higher fees means a more efficient service, they may even be prepared to foot the bill.Mark Wilding is senior reporter on Property Week